If you’re disappointed by the iPhone 4S, you’re nuts

Cue the whiners. Apple didn’t announce an iPhone 5 today, just an updated version of the iPhone 4, called the iPhone 4S. Apple stock is down a bit in a flat market. Many are claiming to be disappointed. But here’s the thing: You shouldn’t be.

For users, this is still the best phone that money can buy — even better today, with some new features. And for investors, Apple will sell record numbers of these devices, probably earning record profits.

The iPhone 4S is a significantly different device under the hood, including a faster processor, better camera, faster mobile web access, better antenna design, worldphone features, and better battery life. In other words, a much better phone. (These aren’t just “specs,” either — these things matter.)

Remember that what makes an iPhone an iPhone is mostly software. Apple’s iOS 5 looks great, and that matters the most. I am especially excited for iMessage, so I can stop paying for text messages. The new Siri assistant features look like they could be cool, too.

More than 90% of Americans still don’t own an iPhone. Heck, two-thirds of Americans still don’t own a smartphone. So the iPhone 4 design isn’t “old” to them. (Not any more than the Motorola RAZR that they still use.) It may not be a “must-upgrade” for everyone, but most people don’t buy new phones every year, anyway. Meanwhile, it’s an incredible upgrade for iPhone 3GS and iPhone 3G owners, as well as folks using older Android devices, BlackBerries, or dumbphones.

Keeping the same exterior design may help Apple in production and manufacturing, so it doesn’t face shortages this time around. Already, Apple is boasting the fastest iPhone rollout it has ever had. This quarter should see record iPhone demand, potentially over 25 million units. It’s important not to have any significant trouble delivering, because that’s how you lose to the competition. (Keeping the same case design may even boost — or at least help maintain — margins, too. Not the only thing that matters, but a nice bonus.)

Now Apple has set the stage for a new iPhone 5 design next year, with 4G LTE, NFC, and whatever else it has been working on.

While the iPhone 4S may seem like a let-down, I assure you: It is an excellent phone, and it should do great things for Apple’s business.